National debt and `the children'

Politicians make names for themselves as they sponsor programs to which their names can be attached or equivalently become promoters of such programs. Similarly, chairs of the various congressional committees come to regard programs under their purview as theirs to “protect.” The net effect of these is to increase expenditures and the deficit, hence the national debt. Notably absent from these concerns are “the children” except as they can be used to justify further spending and increased debt.

But by far the most important area in which “the children” are concerned is the debt, particularly the burden it imposes on them. Increases in the debt impoverish youth by lowering their standards of living because they must pay higher taxes on the increased debt. This to begin paying off the principal and interest of the outstanding public debt or paying the interest on the growing debt. Of course, if the debt is entirely held internally, the main issue is a redistribution one.

Foreigners however own about 30% of it, so there remains the interest payments that lower the standard of living of youths. As the debt continues to accumulate, interest on the debt continues to grow, hence “the children” are now faced with progressively lower standards of living as more of their disposable incomes are devoted to

taxes on the accumulating debt. The current generation consequently is raising its standard of living at the expense of the next.

Greed is never seen in ourselves. It is always others who are greedy. Here, however, we the current generation are the greedy ones. We exploit for ourselves the standard of living of “the children.”

So, if we are so concerned about “the children,” why do we continue to deficit finance or is it that we really are not all that concerned?

The development of the theory of deficit finance held that deficits were to be used in a countercyclical manner, as a vehicle to move the economy to its long-run potential. At that point the economic surpluses were to retire the previous deficit induced debt.

Evidently, that former deficit rationale has been supplanted by one of permanent deficits, the effect of which is increasingly to impoverish future generations by increasingly lowering their standards of living.

There is a bidding war, principally among Democrats, to see whose policy proposal would increase the debt the greatest, that is, whose proposed policy if enacted reduces standards of living of “the children” the most. Perhaps someone should ask the relevant candidates why they wish to impoverish future generations!